IRS wants outside look at feasibility of its modernization

The IRS has hired a consultant to review its Business System Modernization plans.

The tax agency earlier this year missed the initial release date for the Integrated Financial System, originally scheduled for April rollout. Officials say IFS is now on track for release in October.

Mitre Corp. of Bedford, Mass., will review schedules, cost and functionality of new projects to determine whether the assumptions are realistic, IRS CIO Todd Grams said.

'I'll have a third party taking a look at this to give me a level of comfort that what we are committing to is reasonable,' he said, to avoid more errors such as promising IFS would be finished in a year.

After Prime contractor Computer Sciences Corp. ran into problems with data to be used by the system, IRS pushed back the release date. Grams said although he was disappointed not to meet the original schedule, a Mitre study this year showed the agency had set itself up for failure.

The study said large financial companies take an average of 28 months to implement financial management software from SAP America Inc. of Newtown Square, Pa. The IRS had expected completion in less than half that time.

'Part of what has gotten us into this problem of missing the deadline by a year is that we were totally unrealistic in the expectations we set for ourselves,' Grams said. 'We have got to be more realistic and learn from others how long it's going to take to do some of the things we're signing on to do.'

The Contractor Collection Support and Filing project and payment compliance enforcement are the first two projects Mitre will examine, Grams said.

Getting IFS running over the next few months is one of the IRS' top priorities. 'We've got a lot to do and a narrow window between now and the first quarter of fiscal 2005,' Grams said.

Recent IFS developments are encouraging. 'We have actually completed our systems integration testing for the data conversion from the old system to the new system, and we're a few days ahead of schedule in the final mock-up that we're doing of that,' he said.

But previous delays have left the agency with only a few extra days to meet the schedule, Grams said.

CSC anticipates that the new financial system will be ready for its scheduled October release, despite a statement in the IRS Oversight Board's recent annual report that the deadline may be in jeopardy.

Although the IRS passes an audit every year, its current financial system doesn't impose the same requirements for clean and complete data as the new SAP system, said Jim Sheaffer, CSC's vice president and general manager of the Prime alliance. 'A lot of financial issues were unexpected,' such as missing data in files, some of which had to be keyed in manually, he said.

The conversion programs take data from the old system and put it in the appropriate place in the new system, but there are some anomalies. 'We just have to figure out which bucket we want it to go in,' Sheaffer said. 'You don't necessarily have to write new code as much as decide which is the appropriate place to put certain groupings.'

When CSC started testing with production-type data, the vendor also found things it hadn't anticipated from the requirements. So the company revised some requirements and changed the software to satisfy them. 'Those were largely in the interface programs between the new financial system and a variety of legacy systems,' Sheaffer said.

Final practice run

CSC is making the final practice run this month to convert files from the legacy financial system to IFS, he said. It will start converting live files next month and will continue through the end of the fiscal year on Sept. 30, as the agency conducts its annual accounting. The conversion process is running while IRS closes its books, he said [GCN, Aug. 2, Page 9].

'We'll start to use IFS for initial operations in early October in a rolling implementation,' Grams said. 'The data conversion will go on a little beyond that.'

The IRS will make its first financial statement from the new system Nov. 10, he said.

CSC also is building interfaces between IFS and feeder systems for procurement, payroll and travel, Sheaffer said.Management reforms helped IFS advance despite the schedule delay. For example, the IRS negotiated last month with CSC for the final milestone work, and their agreement significantly reduced the government's financial risk while raising CSC's risk.

'They have a much better incentive to deliver the product in a timely manner,' Grams said.